"While the week started well, we are now seeing widespread selling for global stocks, with traders instead choosing to shift their focus towards the likes of gold and the yen," he added.

Gold, seen as a store of value in uncertain times, jumped back above $1,300 per ounze for the first time in nine months, while the yen strengthened against the dollar and struck a near-seven week high versus the euro.

Madrid shed 0.5 percent and London fell 0.9 percent.

"The tragic event in Barcelona yesterday have shook tourist-related stocks," said David Madden at CMC Markets UK.

"When events like this happen, traders wonder will there be a negative impact on tourism, and companies in the travel and leisure sector feel the pressure," he added.

Air France-KLM shed 1.6 percent and IAG, which owns British Airways and Spanish carrier Iberia fell 2.0 percent. InterContinental Hotels Group gave up 1.6 percent.

On Thursday, the S&P 500 Index had tumbled by its second-biggest drop of the year as the markets were swept by rumours that Donald Trump's economic advisor Gary Cohn would resign owing to unhappiness over the president's response to a violent rally by racist groups in Charlottesville, although a White House source denied the claims.

- 'Unfortunate events' -

"The attack in Spain and the rising doubt that Trump will be able to push through with his economic policies are among a series of unfortunate events that's creating uncertainty for investors to pullback and capitalise on their (recent) gains," said Jonathan Ravelas, chief market strategist at BDO Unibank.

Sentiment in the US was dented also after the White House said Trump had abandoned plans to form an advisory council on infrastructure, worsening business fears he will struggle to enact pledges to boost the economy.

"Although it is far too early to say whether global equities will be staging a sharp correction in the coming days, things don’t look pretty on Wall Street at the moment," said market analyst Fawad Razaqzada at Forex.com.

Earlier in Asian trading, Tokyo led the fall in regional stocks, slumping to its lowest close since early May, with the Nikkei also struggling in the face of the resurgent yen.